Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.

Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(a) Your answer is incorrect. On January 1, 2025, Culver Corporation sold a building that cost $259,320 and that had accumulated depreciation of $102.520 on the date of sale. Culver received as consideration a $249,320 non-interest-bearing note due on January 1, 2028. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, eg. 1.25124 and final answer to O decimal places, e.g. 458,581.) The amount of gain should be reported eTextbook and Media Q Search (b) 33
Which of the following will cause a difference in book depreciation and federal depreciation? Choosing to depreciate a class of property using straight-line on the federal return and straight-line on the books. Depreciating property with a useful life of less than one year. Electing to take a Section 179 deduction on eligible property. Placing property in service mid-year.
Which of the following costs generally would be capitalized to a property, plant and equipment account? O installation costs related to the machine O import duties incurred on purchase O freight-out O Interest on debt incurred to purchase the item
! Required information [The following information applies to the questions displayed below.] In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In year 3, Longworth sold the machine for $43,200. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $23,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) b. What is the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $67,500? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) $1231 gain/(loss)
Subject: accounting
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ABC Corp calculated that it had sustained a deferred tax asset of $450,000 in respect of a tax loss and deductible temporary difference of $2.25 million but it had not recognised any such asset in the balance sheet. During the year, a business was injected to the company by themajor shareholder and the company began to derive taxable profit to offset with the loss brought forward. Required:1. Discuss the implication of the current development on ABC’s deferred tax asset.2. Suggest journal entries to effect the implication in (1).3. If the tax rate is increased to 30%, discuss and suggest journal entries.
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(CO F) XYZ Corporation purchased land and an office building for $2,800,000. The real estate contract did not specify the amounts to allocate to the land and to the building. An appraisal determined the fair market value (FMV) of the land to be $1.000,000 and the fair market value (FMV) of the building to be $3.000,000, a) Please calculate the basis of the land. Show your work. b) Please calculate the basis of the building. Show your work.
[The following information applies to the questions displayed below.] DLW Corporation acquired and placed in service the following assets during the year: Asset Computer equipment Furniture Commercial building Assuming DLW does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) a. What is DLW's year 1 cost recovery for each asset? Asset Date Acquired 2/26 2/26 12/20 Computer equipment Furniture Commercial building Total Year 1 Cost Recovery $ Cost Basis $ 19,500 $ 18,000 $ 341,000 3,900 2,572 9,050 15,522
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